BB&T Takes Rate Hit as Revenue and Profit Rise
January 19 2017 - 7:30AM
Dow Jones News
By Austen Hufford
BB&T Corp. said profit and revenue rose in its latest
quarter as recent acquisition costs diminished but took a charge
related to the increase in interest rates.
The Winston-Salem, N.C.-based lender reported earnings of $643
million, up from $542 million a year earlier. Per-share profit grew
to 72 cents from 64 cents as the number of shares outstanding rose
4%. Excluding merger costs and other items, earnings per share were
73 cents.
Total revenue for the fourth quarter, which is a combination of
net interest income and fee-based income, grew 8.3% to $2.73
billion.
Analysts polled by Thomson Reuters had expected adjusted profit
of 73 cents a share on $2.79 billion in revenue.
Chief Executive Kelly King said higher interest rates created
$34 million in pretax charges but that revenue growth was strong
and the bank controlled expenses.
In December the Federal Reserve approved its second rate
increase in a decade and signaled that interest rates would rise at
a faster pace than previously projected.
"We are well-positioned for future interest rate increases," Mr.
King said Thursday.
Fee-based income rose 14% to $1.16 billion on increased
insurance and investment banking and brokerage fees. Net interest
income rose 4.1% to $1.57 billion.
Expenses rose 4.4%, driven by higher personnel costs that were
partially offset by a reduction in merger-related charges.
In recent quarters the regional bank has made a number of deals
including a $1.8 billion purchase of Pennsylvania-based National
Penn Bancshares Inc. and its $500 million deal to acquire U.S.
wholesale insurance broker Swett & Crawford. Merger costs fell
to $13 million from $50 million last year.
Taxable equivalent net interest margin, a key profitability
measure, fell to 3.32% from 3.39% a quarter before and 3.35% a year
before.
BB&T set aside $129 million for credit losses, the same as
in the fourth quarter last year.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
January 19, 2017 07:15 ET (12:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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